economics MCQs – Page 127

Practise multiple-choice questions from economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

economics Mcqs

1. the national economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

2521. In autarky, the relative price of X, in terms of Y in A would be ?
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A. 1 Y

B. 1/2 Y

C. 4/3 Y

D. 3/4 Y

2522. According to Harris and Todaro, creating urban jobs by expanding industrial output ?
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A. will generate more government revenue through urban wages

B. induces government to increase minimum wages

C. is insufficient for solving the urban unemployment problem

D. will generate capital-intensive technologies

2523. When the price of foreign currency (the exchange rate) is above the equilibrium level ?
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A. an excess demand for that currency exists in the foreign exchange market

B. the supply of foreign exchange shifts outward to the right

C. an excess supply of that currency exists in the foreign exchange market

D. the supply of foreign exchange shifts backward to the left

2524. A negative externality generates ?
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A. a social value curve that is above the demand curve (private value curve) for a good

B. a social cost curve that is below the supply curve (private cost curve) for a good

C. none of these answers

D. a social cost curve that is below the supply curve (private cost curve) for a good

2525. In autarky the relative price of wine, in terms of beer, in Country B is ?
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A. 1W = 5B

B. 1W = 4 1/2B

C. 1W = 3B

D. 1W = 6B

2526. The terms of trade is given by the prices ?
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A. Paid for all goods exported by the home country

B. Received for exports and paid for imports

C. Received for all goods exported by the home country

D. Of primary products as opposed to manufactured products

2527. The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?
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A. absorption

B. adjustment mechanism

C. pass through

D. currency contract period

2528. Fiscal drag occurs when ?
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A. Tax bands do not increase with inflation

B. Tax rates move inversely with inflation

C. Tax banks increase with inflation

D. Government spending falls to reduce aggregate demand

2529. The asset market approach views exchange rates as being determined mainly by ?
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A. the use of import tariffs and quotas by governments

B. efforts of investors to balance their portfolios among financial assets denominated in different currencies

C. the relative growth rate of national output between countries

D. the current account balance of each country

2530. By controlling the monetary base economists mean ?
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A. controlling the money multiplier

B. making banks keep a certain % of their assets as M0

C. not allowing commercial banks to issue notes and coins

D. restricting the amount of cash in circulation

2531. Fiscal Policy refers to ?
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A. The actions of the central bank in controlling the money supply

B. The government regulation of financial intermediaries

C. The governments attitude to taxation

D. The spending and taxing policies used by the government to influence the economy

2532. If Swedens currency depreciates relative to Norways currency ?
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A. Norways exports goods become cheaper to Swedens residents

B. Swedens export goods become cheaper to Norways residents

C. Swedens export goods become cheaper to Swedens residents

D. Norways export goods become more expensive to Norways residents

2533. Over-funding is when the State Bank of Pakistan ?
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A. buys government securities on the open market

B. sells more government bonds than are required to finance the PSBR

C. sells government securities on the open market

D. sells less government bonds than are required to finance the PSBR

2534. Which of the following professionals is most likely to be able to generate the income of a superstar ?
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A. the best professor

B. the best medical doctor

C. All of these answers participate in markets that could generate a superstar

D. The best accountant

E. the best writer

2535. Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
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A. differential actions

B. forward transactions

C. cash transaction

D. arbitrage

2536. Small nations with more than one major trading partner tend to peg the value of their currencies to ?
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A. a single currency

B. gold

C. a basket of currencies

D. silver

2537. Country A has the comparative advantage in ?
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A. Wine

B. Beer

C. Both wine and beer

D. Neither wine nor beer

2538. If a country has a liner (downward sloping) production possibilities frontier, then production is said to be subjected to ?
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A. decreasing opportunity costs

B. constant opportunity costs

C. first increasing and then decreasing opportunity costs

D. increasing opportunity costs

2539. IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?
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A. $50 per pound

B. $1.00 per pound

C. $8.00 per pound

D. $2.00 per pound

2540. Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?
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A. adjustable pegged exchange rates

B. crawling pegged exchange rates

C. managed floating exchange rates

D. dual exchange rates

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